Why do I need a Warehouse Management System if I already have an ERP system?
ERP systems are central to any wholesale or distribution business. They automate many processes and allow information to flow between various business functions.
Typically, ERP systems deliver inventory management capabilities such as item-tracking processes as goods are picked, packaged, and shipped. For this reason, many companies choose to invest in a dedicated warehouse management system or WMS to digitize and automate all aspects of inventory control. This is a popular trend for companies with high-volume and highly automated distribution centers.
What is a Warehouse Management System (WMS)?
Compared to an ERP system’s standard features, a WMS offers a high level of sophistication. As a result, organizations can continually monitor their goods’ location as they make their way to, through and out of the warehouse. They can thus maintain control over:
- the flow of goods.
Companies that have a WMS can also leverage real-time intelligence to optimize their goods’ location and shelf life and make smarter use of their warehousing space. And because a warehouse is one large gear in a complex machine, other departments, such as manufacturing, purchasing and customer service, need to access warehouse data to make decisions. This means that your WMS should communicate efficiently with your ERP system.
Connected vs integrated to your ERP
Most third-party WMS applications are only connected to their ERP counterpart rather than integrated with it. This lack of integration may be an issue. Both applications run on separate databases or even different servers; they also use middleware or batch export or import processes to move data between systems. These transactions add unnecessary complexity, as well as data entry duplication.
To mitigate this problem, companies develop custom interfaces, which generate additional expenses. With two separate inventory datasets, it's impossible for departments to get a clear report on warehouse activities.
What is the advantage of having an integrated ERP and WMS vs interfaced?
It all depends on whether your business values timely and efficient order processing and shipping. When your ERP and WMS are fully integrated, you can:
- Achieve the speed and agility your business needs to compete in today's marketplace.
- Provide real-time information to your management team to enable confident decision-making.
- Equip your sales team to deliver on the commitments made to customers.
- Ensure that your customer service can maintain a high standard of communication with your customers.
- Notify your purchasing department on order and shipment statuses.
- Truly implement customer-centric picking strategies such as shelf life combined with the “First Expired, First Out” inventory management principle.
- Eliminate human intervention (and data entry duplication errors) with a seamless transaction flow.
- Improve the speed and accuracy of the billing process.
Full integration provides your business with a single efficient system. On top of fulfilling its core function, the system is interconnected for added visibility and control, resulting in simplified, transparent and end-to-end business processes. Goods can be optimally organized to make the best use of your physical warehouse space and your employees’ work hours.
Furthermore, you can generate accurate reports that the rest of the company can use to make reliable, evidence-based decisions. That is how you generate value in today’s marketplace.
Get help from experts
A WMS can greatly improve your warehouse’s efficiency and support the growth of your business. It all starts with the right tools and the right implementation method. Give us a call if you need help in this department!